Real Estate News
Local Area Faring Better Than Most, But Not Immune to Subprime Debacle
NWREporter April 2008
Without question, the Central Puget Sound real estate market is in a state of change, notes economist Matthew Gardner and new editor of the Central Puget Sound Real Estate Research Report. "After several years of stellar growth in the residential market, although not record-breaking by more macro standards, we are seeing the effects of the subprime debacle hit our area," he stated.
In previewing the latest edition of the semi-annual report, Gardner acknowledged it would be "extremely short-sighted" for anyone to believe we are immune to the subprime debacle, but adds, "I would contest we are currently faring better than the country as a whole, and that we will come out the other side somewhat scarred but not totally beaten."
The report, prepared by the Washington Center for Real Estate Research (WCRER), contains real estate market data and analysis for King, Pierce and Snohomish counties. Among some of the findings in the current edition:
- The number of plats and lots applied for has flat lined or decreased as builders take stock of their current inventories and scale back on production until the market has time to absorb inventory.
- Development of new condominiums appears to be continuing so far unabated (but Gardner believes this will slow as financing requirements continue to tighten for developers of this product type). "We may be reaching some price thresholds in the expensive market," he remarked.
- We are moving to a more balanced market in 2008.
- First time buyer affordability “is a topic in dire need of attention,” suggests Glenn Crellin, director of WCRER. Gardner believes tightening credit standards will only exacerbate this problem.
- In the rental sector, vacancy rates are very close to 20-year lows, but Gardner offers a word of caution, noting, "We may see pent-up demand being usurped by substantial new supply coming toward the end of this decade."
